Former Oracle finance guy joins board of fast-rising database startup

A former Oracle ORCL executive is taking a seat on the board of a fast-rising database startup called Couchbase, the Mountain View-based startup said on Monday.

Jeff Epstein was Oracle’s chief financial officer from 2008 to 2011. Epstein caused a bit of a stir when he suddenly resigned in April 2011, which led to Oracle installing Safra Catz to take over as CFO. Catz became Oracle’s co-CEO along with Mark Hurd when head honcho Larry Ellison stepped down to become the executive chairman of Oracle’s board and the company’s CTO.

Couchbase specializes in a type of database technology called NoSQL, a category that some analysts say could pose a threat to Oracle, the leader in the relational database market. Whereas relational databases handle data that can be stored in rows and columns, NoSQL databases handle messier unstructured and machine data, which doesn’t conform easily to that row-and-column format.

NoSQL-focused companies like Couchbase and MongoDB are not yet eating Oracle’s lunch but that doesn’t mean that they won’t put a dent in Oracle’s business going forward. Epstein, an operating partner at Bessemer Venture Partners, said that while Oracle is successful and profitable, it is “not growing quickly.”

Epstein said he’s excited to be associated with a company that is specializing in NoSQL, and that he believes over the next few years that more companies will create applications based on the database and will be running most of their business on it.

Epstein said he doesn’t expect big companies like JPMorgan to ditch Oracle as that would be an expensive endeavor. He said regarding Oracle that “while revenue is not growing, it is not declining,” which can be associated with the hundreds of thousands of current Oracle companies that aren’t likely to leave Oracle any time soon. Those companies have Oracle databases firmly embedded into their current architecture and applications. But companies like Couchbase can pick off new applications even at these big companies.

Anyone who has ever met an Oracle ORCL sales person knows from a high-pressure sale.

For these people much of their rich compensation comes in bonuses earned when they hit particular quota numbers. So it’s not at all surprising that Oracle, now all-in on cloud computing, is telling its sales people to push cloud and structuring incentives so that cloud sales are richly rewarded while sales of traditional on-premises software licenses, not so much.

If there is any doubt about Oracle’s priority these days, co-founder and executive chairman Larry Ellison says it’s cloud, and when Ellison speaks, the sales staff listens, especially when compensation aligns with what he says.

So, if an Oracle sales person hits 200% of her quota on sales of traditional on-premises database or middleware software, but misses the mark on cloud by even a smidge, she’s not going to make the big bucks she would if she hit the cloud number alone.

This is not a new tactic. When Oracle, which had no comment for this story, came out with its Exadata hardware several years ago, sales people were paid more based on their hardware quotas than on software. So, while the hardware price may not have been discounted, sales people were cutting the price of associated software, sometimes to the bone, to make their server number. The salesperson made more money, the customer saved money at least on upfront software purchases. Win-win. Now pretty much the same thing is happening in cloud, according to reports in CRN and Business Insider.

According to CRN:

For a customer that needs to buy $1 million in net new Oracle software licensing (after discount) for a budgeted, on-premise project, Oracle sales reps will knock the price down to $800,000 if they agree to buy $200,000 in cloud credits, the sources told CRN.

The customer also saves money on its software support renewal, which costs 22 percent of the total amount of software they buy. After the first year, the customer can renew support based on the $800,000 figure as opposed to the $1 million figure.

In addition, Forbes reported last month that Oracle is wielding software audits — in which it checks to make sure big customers are complying with their Oracle enterprise license agreements—to sell more cloud.

According to that story, Oracle, which would not comment, is calling lawyers in faster to invoke “breach notices.” These contractual notices mandate that non-compliant customers stop using the relevant software within 30 days. If the software in question happens to be the company’s lifeblood database, that is a potentially lethal threat. But guess how the customer can avoid all that unpleasantness? By buying cloud! Cha-ching for Oracle.

Many software companies use software audits to wring more revenue out of existing customers, and critics suspect that licensing contracts are so complicated and long that it would be a miracle for any IT department to stay in compliance. Microsoft MSFT at least has promised to simplify this process, although the jury’s out on that effort.

In some cases Oracle’s existing customers are signing up for cloud to get better deals elsewhere or to stay out of the legal doghouse. But that’s not the end of the story. The ticking time bomb here is that is that those signing up for “cloud” to get heavy discounts on other gear, may not end up using the cloud at all.

“We know people buying cloud to get the better software deal, many of whom may have the option to will turn it off in a year,” said Daniel DeVenio, vice president at Palisade Compliance, which specializes in Oracle licensing advisory services.

So, such short-timers may be one-time gain for Oracle (or Microsoft.) but they may not constitute a long-time cloud win.

Cashing in on celebrities’ names: How relatives of famous people do it

There’s a deep-rooted tradition of the relations of successful people following in the family footsteps, whether in business, politics, or entertainment: you have your Heinz family, your Kennedys, your Barrymores.

But the following are examples of several relatives who benefit from the recognition of their famous family name when launching products or businesses in other fields. It’s a fine line between appearing tacky (cashing in) and savvy (aligning one’s own product with an established brand–and ideally borrowing some of the name’s associated goodwill). Read on to find a rock star’s dad peddling a family recipe in the grocery aisle, showbiz daughters venturing into the fashion world, and more.

With revenue flat, Oracle blames strong U.S. dollar

Shares of Oracle jumped in after-hours trading after the company reported flat revenue in its most recent quarter. The software giant blamed its lack of sales growth on the strong U.S. dollar weighing down its overseas business. Here are the key points from Tuesday’s third-quarter earnings report.

What you need to know: Oracle ORCL posted the same third-quarter revenue year-over-year: $9.3 billion. That total came up short of Wall Street’s expectations, as analysts had predicted $9.46 billion in sales. Oracle also reported declining profits for the quarter. The company earned $2.49 billion last quarter, or 57 cents per share, which is down slightly from $2.56 billion in the same quarter last year.

Oracle blamed its flat sales and profit drop on unfavorable currency fluctuations, as the company said it would have posted a 6% bump in revenue, along with a 7% gain in profits, based on a stable exchange rates.

“Once you normalize for exchange rates, it was a very strong growth quarter for us,” co-CEO Safra Catz said in a statement.

The big number: Oracle also announced a 25% rise to its quarterly dividend, from 12 cents per share to 15 cents, with shareholders set to receive the cash return in April.

The market reacted favorably to the increased dividend. Oracle’s stock fell initially in after-hours trading, but then swiftly rallied to gain about 2%.

What you might have missed: Oracle has placed a lot of focus on its cloud business, which still makes up only about 6% of the company’s overall revenue even though sales were up almost 30% in the third quarter. Co-CEO Mark Hurd said in a statement that the company did nearly $200 million in new cloud business in the third quarter and chairman Larry Ellison said Oracle is on its way to more than $1 billion in new cloud sales in 2015.

The myths behind pushy salespeople

What does it take to be a good salesperson? There’s a wide range of responses. Most reflect what you’d expect to find in the Boy Scout Handbook, with commonly cited traits like modesty, listening, curiosity, achievement orientation, and lack of discouragement. In pop culture, it’s a different story. Salespeople are represented by the likes of Leonardo DiCaprio’s flamboyant character in The Wolf of Wall Street, who addresses a group on how to make a sale by challenging them to “sell me this pen.” And popular business author Dan Pink comes at it from yet another angle, touting a personality study which claims that “ambiverts” (people neither extremely introverted or extroverted) sell best.

These traits are so broad that, at best, they simply say that people tend to do business with people they like (but not always and not as often as many sales trainers assume). At worst, they recycle the old cynical description of a salesperson as someone who practices “the art of arresting the human intelligence long enough to get money from it.” In both cases, they’re stereotypes — formulaic and hackneyed images that obscure the realities.

For the realities, look at successful entrepreneurs—most of whom, in early-stage ventures, must sell—and their diverse paths. Jim Koch, for instance, went from bar to bar with six packs of beer to get Sam Adams started. Larry Ellison adopted famously aggressive sales tactics when he started Oracle Technology, a business where, if you win, you win a long-term contract and a string of licensing fees, and if you lose, you’re out of that account for years. It pays to be aggressive in that situation. But Mary Kay Ash focused her cosmetics salespeople on a combination of visible incentives (the signature pink Cadillacs), the intrinsic rewards and constant celebration of female achievement (when outlets for such achievements were more limited), and the kinder and gentler power of social networks.

In short, sales talent comes in all temperaments, because selling jobs vary greatly, from the products sold and the customers encountered to the relative importance of technical knowledge as opposed to relationship-building. Studies have examined emotional and rational appeals, product versus personal selling approaches, qualities like “emotional intelligence,” and demographics (e.g., age, education, years of sales experience), and they find no clear cause-and-effect links between personality and sales success.

Selling effectiveness is not a generalized trait. It’s a function of the sales task. These conclusions have financial, social, and governance implications. Most firms spend more on sales than any other area. Across industries, salesperson turnover is about 25% annually, which means that the equivalent of the entire sales organization must be hired and trained about every four years in many firms. That’s a lot of money and effort, so beware the sales guru with the all-purpose assessment tool or training methodology.

And think about the criteria used by managers in hiring and training. Research indicates a weak link (typically, less than 25%) between interview predictions (with or without personality tests) and job success, especially in sales, where many managers hire in their own image because “how I did it is the way to do it.” The best results, however, occur when tryouts trump interviews, which is why some firms pay job candidates to spend several weeks working on a project before making a hiring decision.

There are also societal implications. About 14 million people have sales jobs in the U.S., and this ignores the millions more who are called associates or managing directors, but who sell for a living. Unfounded stereotypes block paths for many people who could do the job, but never get a chance due to a blinkered assessment tool or unfounded assumption about having “the right personality” for the job.

Finally, a warning to executives and board members. If you are evaluating sales numbers, the facts about selling should motivate you to examine and ask questions right now about the part sales tasks play in your strategy in order to avoid being misled by glib generalizations about selling. The sales task, not a mythical “sales personality,” is the place to start to improve top-line performance and big resource allocations in your firm. One size does not fit all.

Frank Cespedes teaches at Harvard Business School and is the author of “Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling” (Harvard Business Review Press).

Which Fortune 100 CEO has the biggest security budget?

There’s plenty of upside to being a Fortune 100 CEO. But the power also comes with a major downside: it can come with all sorts of threats to personal safety.

Scenarios that could endanger a CEO range from the macro—a defense company’s manufacturing of drones could make its CEO a target of the Islamic State, says Timothy Horner, head of Kroll’s security risk management practice—to the micro, a “crazy niece or nephew,” Horner says.

Not only do those threats pose danger to individual executives, but such events could be devastating for a company’s financial health. So it’s no wonder that some of the nation’s most prominent companies pay a pretty penny to ensure their leaders stay out of harm’s way.

Which company shells out the most?

According to analysis of Fortune 100 data in the upcoming 2014 Benefits and Perquisites Report by Equilar, which tracks executive compensation, it’s Amazon. The online retailer paid $1.6 million in 2013 for security perks for founder and CEO Jeff Bezos, whose personal worth totals an estimated $28 billion.

What kind of security can that much money buy?

Amazon isn’t telling. A spokeswoman did not respond to Fortune’s request for comment and the company’s mention of the expense in a 2014 SEC filing describes it in vague terms. The $1.6 million sum “represents the approximate aggregate incremental cost to Amazon.com of security arrangements for Mr. Bezos in addition to security arrangements provided at business facilities and for business travel. We believe that all company-incurred security costs are reasonable and necessary and for the company’s benefit.” Amazon goes on to justify the hefty sum by pointing to Bezos’ relatively low CEO salary of $81,840 and the fact that he’s never received any stock-based compensation.

Of course, Bezos is far from the only exec whose security costs big bucks. Oracle spent $1.5 million on security for Larry Ellison, who recently stepped down as CEO of Oracle but will serve as executive chairman and chief technology officer of the business software company. In an SEC filing, the company said that the $1.5 million went toward security-related costs and expenses for Ellison’s “residence.” The Oracle founder is known for his extravagant real estate purchases, including nearly an entire Hawaiian island in 2012. The filing says that Oracle’s board of directors requires that Ellison have a home security system for his primary residence, including security personnel. “We require these security measures for Oracle’s benefit because of Mr. Ellison’s importance to Oracle, and we believe these security costs are appropriate and necessary business expenses.” The filing says that Ellison paid for the initial procurement, installation, and maintenance of the security equipment and Oracle covers the annual staff costs.

Disney spends the third most money for CEO security, according to Equilar, paying $584,075 to protect CEO Bob Iger, followed by the $385,606 Berkshire Hathaway shells out for Warren Buffett’s safety, and the $320,428 that FedEx pays to ensure that Fred Smith is kept out of harm’s way.

All told, the Fortune 100 spent a median of $28,618 on CEO security perks in 2013, down from $58,600 the year before. That year-over-year change is drastic but comes with some caveats. It doesn’t include security related to air travel, so if a CEO is required to fly on the corporate jet for safety reasons—even for personal travel—that cost is not factored into Equilar’s analysis of a company’s overall CEO security spending. A company is required to disclose the cost of executive perks only if they exceed $10,000, so analyzing a year’s worth of security costs for the entire Fortune 100—which changes year to year—will always include the largest expenditures but often leaves out the lowest.

It’s also worth considering one-time expenses, like the installation of a security system, that may inflate a given year’s spending, says Aaron Boyd, director of governance research at Equilar. Similar fluctuations have cropped up in Equilar’s data before. The average cost of Fortune 100 CEO security perks jumped from $22,000 in 2004—the first year Equilar started keeping track of these expenses—to $37,000 in 2005 only to drop down to $26,000 in 2006. CEO security spending reached its peak in 2010, when the median totaled $85,425—a figure Boyd says may be attributed to companies updating or reviving security protocols after cutting back during the recession.

While the amount companies spend on CEO security varies from year to year, the percentage of Fortune 100 companies that provide personal and home security to their chief executives has held steady, fluctuating only slightly in the range of 45% to 54% over the past five years. Here are the Fortune 100 CEOs of public companies that received a security perk based on proxy filings last year. (There are 10 companies that acknowledge CEO security costs, but don’t disclose how much they spend.)

A $1.6 million security budget like the one Bezos enjoys is generous, says Alan Schissel, a former New York City Police Department sergeant who’s now president and CEO of Integrated Security Services, Inc., a private investigation and executive security firm.

But protecting a high net worth individual who’s in charge of a big-name company is an expensive endeavor. Based on Schissel’s conservative, back-of-the-envelope calculations, a team of four rotating security agents would cost about $18,000 per week. A two-man back-up team to be deployed in the event of a heightened threat or emergency will run about $4,000 per week. A vehicle and related maintenance will cost $30,000 per year, and extraneous local expenses could total about $10,000 annually. If a company supplied all that to its CEO, it would cost just under $1.2 million per year. The company could spend the surplus on a CEO’s residential security systems.

Outfitting a home larger than 15,000 square-feet with surveillance and alarms starts at $25,000 and can exceed $50,000 if a non-traditional access application, like facial, iris, or fingerprint recognition, is used to secure a property, Schissel says. (Bezos reportedly owns a shorefront mansion near Seattle that measures some 29,000 square feet.)

Horner says that half of Kroll’s corporate security business comes from companies’ and CEOs’ just-in-case concerns. The other half is based on active threats. Threats can come from outside a company—like the Islamic State example—or internally. Downsizing and offshoring efforts, labor conflicts, or one particularly disgruntled employee can trigger extra safety precautions, Horner says.

Just how much security a CEO requires often comes down to the individual’s “own fears and perception of being liked or disliked,” Schissel says, and how much shareholders value the CEO as a company asset.

4 ways to (successfully) persuade your boss

MPW Insider is one of several online communities where the biggest names in business answer timely career and leadership questions. Today’s answer for: How do you disagree with your boss? is written by Liz Wiseman, President of Wiseman Group.

Let’s face it; disagreeing with your boss is dangerous. And, it’s likely to go as well as telling a toddler that he can’t have something he wants. Your boss will probably throw an adult tantrum, pout, or dig in her heels. Even when you win, you lose. But, you can’t be a valuable professional or a strong leader yourself without speaking up when your boss is fixated on a hair-brained idea. So what do you do?

Instead of disagreeing with higher ups, help them consider another point of view – perhaps a new way of looking at the situation or a different path to get what they want. By not outright disagreeing with them, you keep them out of defense mode and provide a safe way to change their minds. My mother (a brilliant teacher and school principal) once told me, “Always give kids a way out – a way for them to do the right thing.” The same is true for senior managers.

Here are a few ways you can create intellectual safety and help people see another point of view:

“Yes, and…” – Phil Wilson was the head of HR for both Steve Jobs at NEXT and Larry Ellison at Oracle ORCL – a role where he was often the one hitting the brakes while one of these mercurial leaders was hitting the gas. Rather than tell them “no,” he learned to respond with “Yes, we can do that, and here are some of the consequences…” It opened up a dialogue and allowed the CEO to think through the downsides of his own ideas and arrive at better solutions.

Ask questions– Instead of dissenting, ask questions that help your boss think through both the upsides and downsides of her ideas. Ask about her fundamental objectives. Once you are clear on what she really wants, you can talk through alternative ways to help her get what she needs.

Retreat and regroup– Diffuse the tension by taking time to think through the ideas more carefully. One of my assignments as an executive coach was to help a senior leader at Apple APPL
get “Steve ready,” meaning prepared to present to Steve Jobs, which was often tricky! I shared a strategy I had learned from other successful leaders at Apple: When you and Steve are at an impasse, don’t argue. Indicate that you need time to think through his ideas and come back with a new plan. This demonstration of listening and learning opens up new alternatives.

Remember: the boss might be right– Just because you don’t agree with the boss’s idea doesn’t mean it’s wrong. When I was an executive at Oracle, Larry Ellison asked me to reduce my team by 350 people and then rebuild with a smaller team. This seemed arbitrary and harsh. I retreated, regrouped (gaining support from other executives) and then renegotiated to reduce our workforce by far fewer people. He agreed to my plan. Initially, I was considered a hero by the other executives. But, later when I saw the organization struggle to change, I realized Larry had been right. I wished I had been slower to disagree and faster to learn from his point of view.

When you need to disagree with your boss, be savvy and avoid a head-to-head competition. Help your boss consider new data and arrive at new conclusions. When you’ve managed this well, the new point of view will quickly become his or her own. And, instead of being a Debbie Downer, you become a thought partner – a far more valuable role. And who can disagree with that?

Read all answers to the MPW Insider question: How do you disagree with your boss?

Affluent athletics: 5 sports only CEOs can afford

Many people were surprised last week to learn that Alan Eustace had successfully outdone Austrian skydiver Felix Baumgartner by setting a new world record for high-altitude skydiving with his death-defying jump from the edge of the stratosphere.

Even more surprising? Eustace, who leaped from a balloon more than 25 miles above the earth and fell at more than 800 miles per hour, isn’t your typical daredevil. In fact, he’s a 57-year old computer scientist who also happens to be Google’s senior vice president of knowledge.

Kudos to Eustace –who is more than a decade Baumgartner’s senior – for taking some time off from his day job to tackle such a heart-racing feat. Of course, it occurred to us that Eustace’s side-project was probably a bit expensive, as far as hobbies go. No one has said how much the feat cost Eustace, who spent several years preparing with a small team of scientists and engineers and who very well could have received outside funding. After all, Eustace needed a specially-designed spacesuit with a life-support system as well as a special parachute and helium balloon. (Baumgartner’s balloon reportedly cost about $70,000, though his jump was sponsored by Red Bull.)

In other words, it’s the kind of sport only a reasonably wealthy executive (or, in Baumgartner’s case, a corporate-sponsored daredevil) would likely take up. Here’s a look at a five other expensive sports for only the most affluent of athletes, and some of the top executives who love them.

Bank of America’s BAC CEO Brian Moynihan was recently appointed chairman after having an independent director occupy that position since 2009. Disney DIS recombined the roles for Robert Iger in 2012 after separating them under a very different CEO, Michael Eisner, in 2008. And Oracle’s ORCL chairman and CEO Larry Ellison stepped down as CEO, appointing not one but two successors, and remained as chairman and chief technology officer. At Hewlett-Packard HPQ, Meg Whitman will be CEO of Hewlett-Packard Enterprise and will become chair of HP Inc. Darden Restaurants’ DRI embattled CEO Clarence Otis announced plans to step down, and the company promoted director Charles Ledsinge Jr. as its chairman.

With the split of eBay EBAY and PayPal, no one knows exactly what’s happening. The two new CEOs have been appointed as CEO and president only, so far. In response to an inquiry from Fortune, the company responded: “John Donahoe [current CEO] and Bob Swan [current CFO] will be on one or both boards.” While this doesn’t offer much clarity, it hints that either one or both of these individuals will be an executive or non-executive chairman of these boards.

One way or another, it seems like most companies have decided that board independence is overrated. What’s going on here?

A study published in 2012 found that the cost of paying one person as CEO/chairman was significantly higher than paying two people as CEO and non-executive chairman. The study also found that long-term shareholder returns were significantly better at companies that had separated the roles. This model—an executive CEO and a non-executive chairman—has been adopted in most other economies. Why is the U.S. so resistant?

It may not be that American companies are necessarily stubborn about this type of leadership change. They’re just somewhat slow, and potentially myopic. In 2004, according to figures from MSCI GMI Ratings, almost three-quarters of publicly owned companies in the Fortune 500 had combined the CEO and chairman roles. Some 60 companies that had separated the role had installed the former CEO as chairman. Only 34 companies had a fully independent chair.

That situation has changed dramatically since then. MSCI GMI’s figures show that barely half of the Fortune 500 have combined the roles. About the same number as in 2004 have the former CEO occupying the position of chairman, but over a quarter of companies—118—now have an independent director as chairman.

While this represents substantial change, the amount of back and forth at some companies shows that there are still questions about which leadership structure is the most effective. Surely, if you’ve separated the roles, and it’s worked, why would you recombine them?

Many companies only separate the roles when they are under pressure to do so and when things are going wrong. That was certainly the case at Bank of America right after the financial crisis, when Ken Lewis was in charge. Now that Brian Moynihan is there, the board clearly thinks it’s safe to promote him. It’s the same at Disney, where Eisner was under considerable pressure from shareholders and appointing an independent chairman released some of that tension. It’s the same at Darden Restaurants, where the CEO and chairman roles will probably be recombined once a new CEO is appointed and the company’s challenges are resolved, or when the activist hedge fund Starboard goes away.

So why is it important to have a separate chairman and CEO? Put simply, the CEO is the primary manager of a company and the chairman is the head of the board, which oversees management. There’s really no good reason why one person should do both jobs. And there’s really no sense in recombining the two roles when a company’s problems are resolved. It’s silly to believe that new problems, the kind that will require an independent board’s insight, won’t arise in the future.

Finally, appointing an executive chairman, especially when it is a former CEO, is just a bad idea. It puts two managers—or, in the case of Oracle, three managers—in place where one is sufficient, and there is still no independent check on management. And, really, when a former CEO becomes chair, no one is really in any doubt as to who remains in charge. On the final day of Oracle’s annual OpenWorld conference, Ellison stated that most aspects of Oracle’s management wouldn’t change now that Safra Catz and Mark Hurd had become co-CEOs.

A group of large Oracle shareholders wrote a letter to other shareholders complaining about the board’s accountability. They classified the tech firm’s leadership changes “as simply a rearrangement of the deck chairs which serves to further empower executive management.”

Most, if not all, companies would be wise to appoint an independent chairman and make the position permanent in the company’s bylaws, so the decision can’t be reversed without shareholder approval.

Editor’s note: A previous version of this story incorrectly stated that Meg Whitman will be CEO and chair of Hewlett-Packard Enterprise. In fact, Whitman will be CEO of the company, not chair.

Oracle: The latest target of shareholder ire

A group of major investors has sounded the alarm bells on Oracle. Their message: the tech giant must make serious changes to its board and pay practices, or things will get very ugly very fast.

In a letter to Oracle ORCL shareholders, these investors argued that there was “insufficient board accountability” and “poorly designed compensation programs,” both of which “create significant risks for shareholders.”

Oracle’s board could hardly be described as independent. Including former CEO and current CTO Larry Ellison, there are three executives on the 11-person board. The former chairman, Jeffrey Henley, who is now vice chairman after the company’s recent management changes, is a former executive at the firm. In addition, six directors have been on the board for more than 10 years, a tenure that makes independence very unlikely.

So, what do these investors intend to do about the quality of Oracle’s board?

The Nathan Cummings Foundation, Dutch pension manager PGGM Investments, U.K. pension fund RPMI Railpen Investments, California State Teachers’ Retirement System (CalSTRS), and the UAW Retiree Medical Benefits Trust filed a “proxy access” resolution to be voted on at the company’s November 5 annual meeting. As a group, these shareholders own well over 10 million shares worth more than $385 million as of today’s prices.

Proxy access allows shareholders to nominate their own directors. According to the proposal, only shareholders who have owned 3% of the company’s stock for three years will be allowed to nominate directors.

While the resolution is not binding, if it receives majority support, the shareholder group hopes that Oracle will implement it. Until earlier this year, Oracle ignored shareholder dissatisfaction over its executive pay practices. If it follows the same path with proxy access, it’s fair to expect shareholders to up the ante. For some of the co-sponsors of the resolution, this effort is the culmination of four years of attempts to engage the board about its shortcomings, and patience is growing thin.

The resolution has a very good chance of passing. Most of these shareholders voted against the whole board last year, many of whom would not have received majority support had not Ellison voted his 25% block in favor of them. There is every indication that, without some kind of response from the company that appropriately addresses the group’s concerns, they will vote against the directors again.

Oracle lost its Say on Pay vote—when shareholders get to vote on the executives’ compensation packages—twice in the last two years. While the company has made changes to its pay practices, Deborah Gilshan, corporate governance counsel at Railpen, characterized these as going from “very, very poor to very poor.” “This has gone way beyond compensation and is an indicator of a deeper malaise on the board,” she said.

Catherine Jackson, senior adviser at PGGM, said that if the company failed to respond to majority shareholder demands, there was a very real prospect that the fund would divest itself of its Oracle investments. “After years of putting resources and time and effort into engagement, if the company still fails to listen, it is ridiculous to carry on owning the stock,” she said.

With such a diverse group of shareholders working together—especially given the size of their combined investments—it seems difficult to believe that Oracle will ignore their requests for a meeting, except that Oracle’s intransigence is well-known in the industry. “There is still time before the annual meeting for the company to respond,” said Jackson, indicating that it is up to Oracle now to avoid a confrontation in public with its shareholders. Added Gilshan: ““There are four weeks until the 2014 annual meeting and the ball is in the Board’s court.”